Status: 01/25/2023 03:35 a.m
Online giants in the US have long had an easy time controlling competition. But now a different wind is blowing in Washington. Google is now increasingly feeling the effects of this.
The US government’s competition watchdog is increasing the pressure on Google with a second lawsuit. This time they accuse the internet giant of unfair competition in the online advertising market.
In the lawsuit, the US Department of Justice is demanding, among other things, that Google’s division, in which ad technology is bundled, be broken up.
Google has resorted to illegal methods to eliminate any threat to its own dominance of the online advertising market, it said. Among other things, the Internet group bought up potential rivals at an early stage, according to the accusation. As a result of Google’s actions, publishers made less and advertisers paid more, the lawsuit said. In the end, that hurts everyone.
Google counters government allegations
Google countered that the government was trying to “determine winners and losers in the highly competitive advertising technology sector.” She relies on flawed reasoning that slows innovation, increases advertising costs and makes it harder for thousands of small businesses to grow.
Attorney General Merrick Garland dismissed the criticism: “We don’t pick winners or losers, we pick those who break competition rules.”
Target auctions of ad space
The lawsuit focuses on the so-called “ad tech” market – in particular the technologies for auctions, in which ad spaces are auctioned off in the shortest possible time before a website is displayed to the user.
In a blog entry, Google pointed out that competition from rivals such as Microsoft, Amazon, Apple and Tiktok was increasing. There are also many specialized ad tech companies.
Complaint was looming
Intervention by the US government had been apparent for some time. The “Wall Street Journal” reported last summer that Google had offered the Justice Department as a concession to outsource the “ad tech” division to a separate company. However, it should remain a Google sister company under the umbrella of the Alphabet holding company – and the government’s concessions did not go far enough.
In the first lawsuit in autumn 2020, the US government had accused Google of antitrust violations in the online search business during the time of then President Donald Trump. It was said that the group was making deals with smartphone providers and network operators in order to give its search engine a special position. Google rejects the allegations. The process is scheduled to begin this year.
Several states are joining the lawsuit
Several US states joined the new lawsuit. In addition to New York, this also includes California, where Google has its headquarters.
Some states have already filed their own lawsuits against Google in recent years. The company pointed out that the Justice Department’s new lawsuit is largely based on a lawsuit brought by Texas Attorney General Ken Paxton, which was largely dismissed by a court.